Energy secretary leans towards rejecting Rosebank oilfield

By Daniel Okafor

Energy secretary Miatta Fahnbulleh is minded to refuse approval for Rosebank, one of the biggest oilfields in the North Sea, officials told the Guardian. A ruling is expected later this year. The decision would deal a blow to the North Sea energy industry and hand climate campaigners their biggest victory of this parliament.

The lean towards rejection comes one day after Fahnbulleh approved the smaller Jackdaw gasfield, a move that already triggered protests from parts of the green movement. The two fields sit on opposite sides of her energy security test.

Why Jackdaw passed and Rosebank may not

The mechanism is simple. Fahnbulleh draws a line between gas for British homes and oil for export markets. Rosebank falls on the wrong side of it.

"One is a gasfield that caters for the domestic market, while the other is an oilfield that is mainly for export," she told the Guardian. "It is right that we judge each application in its own right, and it is absolutely critical that the decision is consistent with our climate obligations, our carbon budgets and the end destination we need to get to with the energy transition."

Officials say Rosebank would emit about seven times the carbon of Jackdaw. Fahnbulleh is understood to believe it would do less for UK energy security, because most of its oil would be exported.

What Jackdaw means for bills and emissions

Fahnbulleh announced the Jackdaw decision on a visit to Aberdeen. The field, operated by companies including Adura, will begin producing gas within weeks and will supply homes and businesses from the end of the month, the government said.

It carries a cost. Jackdaw will add an estimated 36 million tonnes of carbon emissions. Fahnbulleh said she had been satisfied it would not violate the UK's climate commitments.

"As we make the transition, we are going to need gas," she said. "At a point when we have got conflict in the Middle East that is triggering an energy crisis, energy security is vital, and homegrown energy is key."

She conceded the approval would do nothing for the government's headline energy target. "This is not about bills," she said.

The UN Environment Programme has recommended global carbon emissions fall by nearly a fifth within four years, and close to half within a decade, to avoid overshooting climate targets by a disastrous margin.

Where the oil money goes next

Fahnbulleh has promised that future North Sea revenues will fund green energy projects through a new energy wealth fund. The fund will receive £2bn in the budget, some reallocated from other parts of her department's spending.

"When we have tax revenues that are coming from the oil and gas industry, it is right that we invest that in the transition we need to make in energy," she said. The money will go to renewables, nuclear and other clean energy schemes.

She could not say which tax revenues would feed the fund, or how much they would raise. "The chancellor will make those details clear in the budget," she said.

Can the industry still win Rosebank?

Labour's 2024 election manifesto committed to banning new North Sea drilling licences. The companies behind Jackdaw and Rosebank instead sought approval under existing licences and resubmitted their environmental applications earlier this year.

Neil McCulloch, chief executive of Adura, one of the companies behind the plans, told the Press Association: "We're very confident now." He argued Rosebank's economics differ from Jackdaw's. "It's a bigger field. It will last longer than Jackdaw, and so I'm sure she'll take that into account when she makes her decision in terms of the jobs and economic impact for the UK."

What does the politics look like?

The Jackdaw approval could strengthen Labour in north-east Scotland, where much of the industry is based and where unions campaigned heavily for the permits. It risks angering Labour MPs in seats challenged by the Green party.

A Savanta poll for the climate group E3G, seen by the Guardian, found nearly a third of voters would be less likely to vote Labour if it approved more North Sea oil drilling. That includes almost exactly a third of those who voted Labour at the last election, and about half of 18- to 24-year-olds.

The Rosebank ruling, expected later this year, will show whether Fahnbulleh's domestic-gas test holds when applied to the North Sea's biggest remaining prize.